Bank Development Agreement

BANK DEVELOPMENT AGREEMENT


This Bank Development Agreement (the "Agreement") is made as of this 18th day of November, 1996, by and among Community Capital Corporation, a South Carolina corporation (the "Holding Company"), and the undersigned organizers of The Bank of Barnwell County (in organization) (the "Organizers").


Preliminary Statement


On October 16, 1996, the Holding Company and the Organizers entered into a Letter of Intent ("Letter of Intent") respecting the formation of a bank in Barnwell, South Carolina (the "Bank"). As contemplated by the Letter of Intent, this Agreement formalizes the terms of the Letter of Intent.


It is understood that the Organizers have initiated the development of the Bank and have recently determined to modify their development plans to accommodate the synergies and other advantages of ownership of the Bank by the Holding Company as set forth herein.


NOW, THEREFORE, in consideration of these premises and the mutual covenants hereafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


Statement of Agreement


1. Structure. The Bank will be organized as a wholly-owned subsidiary of the Holding Company and is anticipated to be a state chartered bank having membership in the Federal Deposit Insurance Corporation and the Federal Reserve System. The applications previously filed by the Organizers will be amended to reflect the Holding Company's participation in the development of the Bank and the restatement of various Bank organizational documents, as deemed necessary by the Holding Company to provide consistency with its other community banks.


2. Capitalization. The initial capitalization of the Bank is expected to be $4,500,000 (or such other amount as may be necessary to satisfy South Carolina banking laws and applicable regulatory requirements). In the event the Bank purchases certain branches from Carolina First Bank, it is anticipated that the Bank's initial capitalization shall increase to satisfy South Carolina banking laws and applicable regulatory requirements. This initial capitalization is anticipated to be funded as set forth in Section 5 below and will be accomplished pursuant to the terms of a Conditional Subscription Agreement between the Holding Company and the Bank, substantially in the form attached hereto as Exhibit A.


3. Development. Each of the parties has agreed to cooperate in all aspects of the development of the Bank and to exercise their good faith and best efforts to accomplish the goals contemplated by this Agreement. Notwithstanding the forgoing, the division of responsibilities related to the organization and formation of the Bank shall be as follows:


A. The Holding Company shall be responsible for the legal and accounting aspects of completing the organization of the Bank and all state and federal regulatory approvals, but the Organizers shall be consulted and have opportunity for input and comment on all material documents and issues related thereto. Subject to the Holding Company's opportunity for input, comment, and approval,


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the Organizers shall procure and provide professional bank consulting services to the Holding Company to assist with the formation of the Bank and all state and federal regulatory approvals.


B. The parties also agree to cooperate in the following: (a) the Organizers' lawful termination of the Organizers' pending equity offering related to the Bank, and the Organizers' immediate refund of all proceeds thereof to subscribers in accordance with the terms of such offering; and (b) the negotiating and pursuit of the acquisition of 5 bank branches in the Barnwell area from Carolina First Bank for the benefit of the Bank.


C. The Organizers shall be responsible for the acquisition and/or leasing of certain real property related to the proposed operation of the Bank, but the Holding Company shall have opportunity for input and comment and shall have approval over the selection of such property and all material documents and issues related thereto.


4. Allocation of Expenses.


A. Expenses Paid By Holding Company.


1. Legal and Accounting Fees. The Holding Company shall be responsible for, and shall advance, all legal and accounting fees incurred by the Holding Company or Bank which are associated with the Public Offering (as defined hereinbelow) and, subject to Section 4(C) below, the formation of the Bank.


2. Employee Expenses. As set forth in that certain proposed Employment Agreement by and between Marshall L. Martin, Jr. ("Martin") and the Holding Company (the "Employment Agreement"), Martin shall be employed as a Vice-President of the Holding Company for an initial term of two (2) years, and his duties shall include assisting the Holding Company with the formation of the Bank. Subject to reimbursement as set forth in Section 4(B)(2) hereof, until the Bank assumes the payment of Martin's salary and benefits under the Employment Agreement as set forth in Section 9 hereof, the Holding Company shall be responsible for, and shall advance, all salary, FICA, perquisites and fringe benefits to Martin as set forth the Employment Agreement.


B. Expenses Paid By Organizers. Subject to reimbursement as set forth in Section 6 hereof, the Organizers shall advance the costs and expenses related to the following:


1. General Expenses. All costs and expenses, other than the costs and expenses to be paid by the Holding Company as set forth in Section 4(A) hereof, incurred by any party in connection with the formation of the Bank, including but not limited to acquisition or leasing of real or personal property, professional bank consulting fees, legal and other professional fees related to the internal affairs among the Organizers and the acquisition of real or personal property as contemplated herein, FDIC and other federal regulatory filing fees, and state filing fees, shall be the responsibility of, and advanced by, the Organizers.


2. Reimbursement of Portion of Martin Expenses. Until the Bank assumes the payment of Martin's salary and benefits as set forth in Section 9 hereof, the Holding Company shall advance and pay all salary, FICA, perquisites and fringe benefits to Martin as set forth in the Employment Agreement and Section 4(A)(2) above. Notwithstanding the forgoing, sixty (60%) percent of Martin's salary, FICA, perquisites and fringe benefits incurred by the Holding Company for the period commencing with Martin's employment by the Holding Company and ending upon the termination of the Holding Company's obligation to pay salary to Martin pursuant to his Employment Agreement shall be


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billed to the Organizers by the Holding Company and immediately reimbursed by the Organizers to the Holding Company.


C. Funding of Organizer's Expense Obligations. To facilitate the payment of such expenses by the Organizers, the Organizers will obtain a $350,000 line of credit (the "Line of Credit") from Greenwood Bank & Trust, a wholly-owned subsidiary of the Holding Company and enter into a contribution agreement among the Organizers to allocate liability for the Line of Credit. The Organizers will be entitled to utilize the line of credit to fund all reasonable organizational costs incurred after the date hereof, plus all organizational costs incurred prior to the date hereof which are determined by the parties (after consultation with the Holding Company's independent accountants) to be properly reimbursable.


5. Public Offering. The initial capitalization and reimbursement of organizational costs for the Bank are anticipated to be funded from the proceeds of a proposed $10,000,000 to $15,000,000 public offering of securities to be conducted by the Holding Company (the "Public Offering"). Such capitalization may, in the Holding Company's sole discretion, be funded from sources other than the Public Offering. The Organizers agree to cooperate in good faith with the preparation and submission of all documents related to the Public Offering as reasonably requested from time to time by the Holding Company. The Organizers further agree to abide by all applicable restrictions under federal and state securities laws which apply to the Public Offering and the Holding Company's participation in the development of the Bank.


6. Reimbursement.


A. Reimbursement to Organizers. Upon the first to occur of the following, the Holding Company shall assume the Line of Credit or otherwise satisfy, or cause the Bank to satisfy, the Line of Credit thereby causing each Organizer to be relieved of liability pursuant to the Line of Credit, up to an aggregate of $350,000:


1. The Organizers in the aggregate have irrevocably subscribed and paid for at least $1,000,000 of securities of the Holding Company, and the Bank is capitalized in an amount necessary to satisfy all applicable state and federal bank regulatory requirements; or


2. The Organizers in the aggregate have irrevocably subscribed and paid for at least $1,000,000 of securities offered in the Holding Company, and the Bank fails (i) to be capitalized in an amount necessary to satisfy all applicable state and federal bank regulatory requirements as a result of facts or circumstances which are not the result or product of, in whole or in substantial part, any negligent, wilful or intentional act or omission of one or more Organizers; or (ii) to become licensed as a lawfully chartered bank as a result of facts or circumstances which are not the result or product of, in whole or in substantial part, any negligent, wilful or intentional act or omission of one or more Organizers; or


4. The Holding Company reserves the right, at its option, to fund the initial capitalization from sources (such as a loan) other than the Public Offering. In the event that the initial capitalization is funded from a source other than the Public Offering, and the Public Offering is not completed within 3 months thereafter, the Holding Company will provide the Organizers an opportunity to subscribe and pay for at least $1,000,000 of common stock in a private placement (or other exempt offering). Upon the successful sale of such securities to the Organizers the Holding Company will satisfy, or cause to be satisfied, the Line of Credit, up to $350,000.


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B. No Reimbursement to Organizers. Without limiting or modifying Section 6(A) above, the parties hereto acknowledge and agree that in the event (i) the Bank fails to be capitalized in an amount necessary to satisfy all applicable state and federal bank regulatory requirements as a result of facts or circumstances which are the result or product of, in whole or in substantial part, any negligent, wilful or intentional act or omission of one or more Organizers; or (ii) the Bank fails to become licensed as a lawfully chartered bank as a result of facts or circumstances which are the result or product of, in whole or in substantial part, any negligent, wilful or intentional act or omission of one or more Organizers, or (iii) the Organizers in the aggregate do not irrevocably subscribe or pay for at least $1,000,000 of securities of the Holding Company, then the Holding Company shall not assume the Line of Credit or otherwise satisfy the Line of Credit, and the Organizers shall remain liable for the Line of Credit.


7. Bank Directors. The Holding Company agrees to structure the initial Board of Directors of the Bank to include and to be limited to each of the Organizers and William G. Stevens, or another director or officer of the Holding Company designated by Mr. Stevens (or in his absence the CEO of the Holding Company). Upon ...